Web-Based Customer Care

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June 1, 1998

Web-Based Customer Care

Businesses turn to the Internet to improve customer service and lower costs

By Justin Hibbard , Gregory Dalton , and Mary E. Thyfault

InformationWeek Shop Talk

What are your plans for Web-based suport? Discuss them in Shop Talk

he Internet is starting to change the way companies interact with their customers. The mandate-besides cutting costs-is to provide a richer, more productive experience than telephone communications for everything from picking mutual funds to tracking packages.

But the shift to Net-based customer support portends major cultural changes for IT managers used to conventional call centers or field services. And the risk of frustrating a customer base accustomed to personal rather than virtual hand-holding can be substantial.

Charles Schwab & Co. is among a handful of companies that aren't waiting around. This week, the discount brokerage will unveil a support system based on Acuity Corp.'s WebCenter 2.0, a product that manages customer-service chat sessions similar to the way call-center soft ware manages calls. Schwab will use the system for internal technical support before rolling it out to its retail customers as part of its online brokerage service. "It's really about reinventing customer service and being very responsive and seamless," says Rick Washburn, managing director of executive automation at Schwab.

With the introduction of WebCenter 2.0, Acuity (formerly iChat Inc.) will reposition itself as an Internet customer-service vendor. WebCenter 2.0 is one of several product introductions scheduled for the next few weeks that show vendors offering systems that merge messaging, telephony, call centers, and customer-management software into integrated Web-based support systems. Within the next two months, customer service software vendor Onyx Software will release Onyx Insight, a knowledge-management app that gives Web users access to information stored in Onyx's back-end databases.

Major industry players also see potential in Internet customer service. IBM's Lotus unit will ship so ftware by year's end called SameTime that lets companies provide real-time customer support on the Web. Microsoft already provides such technology in its NetMeeting product.

At last week's Harvard Conference on Internet and Society in Cambridge, Mass., IBM chairman Louis Gerstner said, "The Internet is about competition, growth, and reaching out to customers." Microsoft executive VP Steve Ballmer was even more emphatic. "The Internet lets companies potentially offer more tailored and focused service than they ever could in a store."

Cost savings is the most frequently cited benefit of Web-based service. "Every time a customer can get support through a Web-based support system, the cost is microscopic compared to a voice-response unit or a human interaction," says Jeff Rumburg, an analyst at Meta Group Inc. Rumburg says the cost of a typical customer service transaction is $5 for a live call agent, 50 cents for a voice response unit, and a few cents on the Web.

MCI says companies that deploy Web-b ased customer service are cutting their costs at least in half. "Over the next 12 months, we are advising our customers to handle as much as 50% of customer care and technical support inquiries via the Web," says Bill Price, VP and GM of MCI's call center services group. That advice isn't just for high-tech customers. "I'm including a discussion of this in every meeting I have with customers," Price adds.

Between now and the year 2000, companies that implement Internet-based service will slash their call-center labor costs by 43%, according to Forrester Research Inc. Without Internet solutions, the same labor costs would likely rise by 3%. "An Internet customer-service center pays for itself really quickly," says Forrester analyst Steve Bell.

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